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Newsom: Amid Pandemic, 'Everything' on the Table in Proposed Budget

The state Department of Finance will deliver its regularly scheduled May Revision of the proposed 2020-2021 Fiscal Year state budget, but in remarks Thursday, Gov. Gavin Newsom called the current document "no longer operable" in the novel coronavirus (COVID-19) pandemic.

Like the legislative session, which recessed March 20, Gov. Gavin Newsom’s proposed 2020-2021 Fiscal Year state budget has been sidelined by the novel coronavirus (COVID-19) pandemic, the chief executive said Wednesday.

In regular noontime remarks updating residents on state actions during the crisis, Newsom expanded slightly on the March 24 Budget Letter from state Department of Finance (DoF) Director Keely Bosler, reminding viewers the state is shifting to a workload budget perspective “which suggests everything is on the table.”

“The January budget is no longer operable in terms of the conversations I’m having with staff and conversations I’m having with legislative leaders. They recognize the enormity of this moment,” said Newsom, who introduced that budget Jan. 10. But since March 12, he said residents have filed 1.9 million unemployment insurance claims in the state, reflecting a sober new reality.

“The world is radically changed since the January budget was proposed, so everything is on the table,” Newsom said, indicating the state is being “benefited modestly” by the federal stimulus via state block grants — but acknowledging the suffering being felt by county and local governments.

With the Legislature still out, DoF is moving ahead on its so-called May Revision to the proposed budget, which provides an update on General Fund revenues, expenditures and reserve estimates “based on the latest economic forecast” along with population, caseload or enrollment estimate changes.

“Despite the current situation, we are still proceeding with planning for a May Revision to be issued in the usual timeline (statute requires that it be sent to the Legislature by 5/14 of each year). We will be reviewing all proposals through the lens, if you will, of the guidelines of the letter,” H.D. Palmer, DoF deputy director for external affairs, told Techwire via email.

The “letter” is Bosler’s Budget Letter, sent to state department directors, staff and legislators, informing them that the global pandemic is expected to have negative effects on the state's anticipated revenues and that the agency will “re-evaluate all budget changes within the context of a workload budget,” including “all support and local assistance adjustments, inclusive of Capital Outlay and information technology projects.”

The letter indicates that “‘agencies and departments should have no expectation of full funding for either new or existing proposals and adjustments,’ save for COVID-19 response-related measures,” Palmer noted.

The ultimate impact to state IT projects and proposals likely won’t be clear for some time.

“As noted, we’ll have to evaluate both the January budget plan and any proposals since then on the basis of how much revenue we respect to be available when we update and revise our forecast in several weeks,” he said.

An amendment March 17 to the FY 2019-2020 budget could offer hope and funding for IT initiatives connected to the pandemic. State Senate Bill 89, which Newsom signed March 17, amended the budget to appropriate $500 million from the General Fund for “any purpose” related to Newsom’s March 4 proclamation of a state of emergency. It authorizes “additional appropriations in increments of $50 million, up to a total appropriation of $1 billion,” and indicates the Legislature’s intent to work with stakeholders on “strategies to be considered for inclusion in the Budget Act of 2020 to provide assistance related to the impacts of COVID-19.”

• Help is now available for unemployed residents, Newsom said, announcing a partnership among entities including Fresno-based Bitwise Industries, LinkedIn, Salesforce and the Kapor Center on a new job listing website, onwardCA.org. The site uses a questionnaire to match respondents by geographic area, skill set and wage preference to jobs around the state. Many jobs derive from four industries that are disproportionately hiring — health care, agriculture, logistics and grocery — the governor said. Roughly 70,000 jobs are already listed, and he said he expects the number to near 100,000 within days.

“That’s about getting us back up on our feet. Not just small businesses, now, people that have been laid off that need a job,” Newsom said.

Theo Douglas is Assistant Managing Editor of Industry Insider — California.